A foundation is a separate legal entity, lacking members and shareholders. Foundations are established to fulfill the wishes of the founder who may be an individual or a corporate entity. These wishes are stated in the Foundation Charter and Regulations. Offshore foundations play a very important role in asset protection and estate planning. Offshore foundations can be used with offshore companies to increase privacy, confidentiality, asset protection and wealth management. Foundations originated from the Liechtenstein civil law legal system and for many years, has served as a model for other jurisdictions. In 2004, the Bahamas introduced Foundation Legislation making it a leading Common Law jurisdiction for the incorporation of foundations. When a foundation is established in a suitable offshore jurisdiction and the residents don`t receive any benefits from it, the assets and income of the foundation are exempt from taxation.
Four categories of foundations exist. These are private, corporate, charitable and special purpose foundations.
Advantages of setting up an offshore foundation include:
Tax Havens where offshore foundations can be set up include